Why Having a Compensation Strategy is a Must

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Why Having a Compensation Strategy is a Must

How much should you pay your employees? Why should you have a compensation strategy? And when was the last time you reviewed your strategy? 

Sue Bailey spends a lot of time thinking about all of these questions. As ERC's Senior Consultant for compensation, benefits and everything in between, Bailey has developed a deep foundation in Human Resources that has been honed over the past 30 years.
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Paid Parental Leave: Policy, Politics, and Parenting

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Paid Parental Leave: Policy, Politics, and Parenting

Although the chances of this Congress successfully passing a bill on paid parental leave are tepid at best (even among supporters of such a measure), one thing is clear, awareness is building on the topic—from the State of the Union address to its own twitter handle #LeadOnLeave.

A mention in the Statue of the Union is usually a sure-fire way to simultaneously be thrust into the national spotlight as well as get written off as political posturing. Even if Washington is a standstill, the media coverage around the U.S.’s lack of parental leave over the past year has placed this issue in a whole new framework—one that just might persuade the American public and business owners alike to take a second look.
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Free Community College: What's all the Buzz?

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Free-Community-College-Whats-all-the-Buzz

The average American is carrying around $27,000 in student-load debt in 2015. American's are either not going to school for the first time or not furthering their education because they can't afford it or don't want the debt.

In the January 2015 State of the Union Address, President Obama introduced many proposals, but one in particular stood out in the education field: Free community college tuition for everyone.
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4 Compensation Topics You Can't Afford to Overlook

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4 Compensation Topics You Can't Afford to Overlook

When the word "compensation" is brought up in conversation, most people assume it just refers to what a person is paid. However, to the Human Resource community, the word compensation is a much more complex topic.

We spoke with Sue Bailey, ERC’s Senior Consultant, Compensation & Benefits, about what HR professionals should look at when it comes to the top compensation topics.
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The State of the Union: 5 Proposals Every Employer Should Know About

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The State of the Union: 5 Proposals Every Employer Should Know About

The State of the Union address is widely viewed as a platform merely for a display of pomp and circumstance. There is an understanding that most of the topics addressed won’t come to fruition based on political pressures and divisions that will make implementation nearly impossible.

While the policy agenda outlined in President Obama’s speech in January of 2015 is likely to follow this same pattern, a mention during the State of the Union does bring additional attention to issues and policies that would otherwise go largely overlooked. For employers, this year’s speech contained a number of bullet points that while they may not become the law of the land, are definitely worth noting.
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Should You Be Performing Facebook Background Checks?

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performing background checks Should You Be Performing Facebook Background Checks?

When it comes to recruiting potential employees, social media has become a popular resource for finding candidates that will fit the required job skills and become a top-performing employee. But is using information from social media profiles a legal and reliable part of the recruiting process?

As reported in the 2013 Hiring Trends and Practice Survey, roughly 8% of HR specialists are using social media to pre-interview a candidate. Another 8% are also using social media for the post-offer and post-interview of a potential candidate.
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Pay Period Leap Year: Handling 27 Pay Periods

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Pay Period Leap Year: Handling 27 Pay Periods

If the question of, “How will you handle 27 pay periods,” doesn’t sound familiar to you, don’t panic. It may not apply to your organization, or if it does, you still have options. 

If your pay cycle is either weekly or bi-weekly, there is a good chance that some years will include an extra payday, although there is some variation to this rule based on the way the calendar falls and the day on which your organization pays employees.

It is also important to note that the extra payday only creates issues for exempt employees who, unlike their non-exempt counterparts who are paid based on hours worked, receive an equal portion of their annual salary each paycheck.

Finally, before agonizing over how to manage an extra pay period, employers should review any and all documents related to the terms of employment that are currently in place, e.g. offer letters or collective bargaining agreements. Specific wording or clauses in these types of documents may actually be the determining factor for which methods remain on the table.

How to handle the "pay period leap year"

Interestingly, despite the variation in the parameters listed above, one area where there is more consistency among local employers is in how they choose to address the pay period leap year.

When asked specifically how they handle years that have 27 versus 26 payrolls for exempt employees, 81% of respondents to 2014 ERC’s Payroll Practices Survey indicate that they “pay as usual.” This overwhelming response of essentially doing nothing has remained true since 2011 when the survey was first administered. Figure 1 below illustrates the other options employers may turn to:

The “other” category elicited several interesting responses, with more than one employer explaining that while in the past they had chosen to divide pay by 27 and adjust benefit deductions, moving forward they would not be making that same choice. They noted that although logistically this change worked smoothly, employees were displeased with a smaller bi-weekly paycheck and overall morale was negatively impacted.

Other considerations

Although these particular employers did not experience any compliance related issues, employers who choose to divide paychecks by 27 should be aware of any lower wage workers on an annual salary. If the new math puts their pay below the FLSA threshold, this would in fact alter their FLSA exempt status and require the employer to pay overtime, etc to these employees for one year.

Another alternative option, although not at all common, was to simply reduce the final paycheck of the year.

As legal experts point out, this final option can also be dangerous in terms of FLSA as well as state minimum wage laws for any salaried non-exempt employees that might fall under the minimum hourly wage during the final reduced pay period—not to mention the likely backlash and drop in employee morale that could accompany a significantly reduced final holiday paycheck.

Ultimately, no matter which option an organization selects to accommodate a 27 pay period schedule, the key is communication with employees. Clearly if any paycheck along the way is going to be smaller, employees will need to know in advance, but even for employers that do nothing this year, communication is still important. For these employees, an extra paycheck could mean as much as a 4% raise, a raise that will be confined only to that year. So whether your payroll budget is staying the same or hitting an all time high with 4% raises, making sure everyone is on the same page will allow for a much smoother and easier transition into the years beyond.

View ERC's Pay Differential Survey Survey Results

This survey reports on common pay differentials from Northeast Ohio employers for hourly employees, including shift differentials, lead premiums, overtime, and on-call pay practices.

View the Results

13 New Year's Resolutions for HR Professionals

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13 New Year's Resolutions for HR Professionals

A new year brings New Year's Resolutions. The most common personal resolutions are to be more health conscious, work out more, and spend more time with friends and family. But what about your professional life?

As HR professionals, there are many aspects of the workplace that you are responsible for. HR is constantly growing and becoming more important to organizations. In keeping with this growth, the new year creates a great reason to do better this year than the last for not only the HR department, but the organization as a whole. Here are a few practices to consider.
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